The fear of missing out has spurred national house prices to bounce back in November despite the recession.

Prices jumped by 0.8 per cent over the month, with every capital city recording monthly increases of between 0.4 and 1.9 per cent, according to CoreLogic.

National prices are still 0.7 per cent below pre-pandemic levels, after a 2.1 per cent price drop between April and September, but that gap is likely to be bridged within the first three months of 2021.

And Canberra has overtaken Melbourne to become Australia’s second most expensive city, with its median house price coming in roughly $700 higher than the Victorian capital.

Analysts at CoreLogic suggest the house price recovery has been driven by a “sense of urgency” among owner-occupiers to get the jump on their competition while only a few properties are listed on the market.

With the Reserve Bank flagging that interest rates will remain at record lows for at least three years, CoreLogic head of research Eliza Owen said this had laid the groundwork for rampant buyer demand.

We are expecting to see values continue to rise through early 2021, and that’s only because accommodative monetary policy is set to be in place for years to come,” Ms Owen said.

“With the pandemic being such an unprecedented event, a lot of people were uncertain about how property values would play out … but when you consider the magnitude of monetary policy, fiscal policy and how it’s converged with rebounding consumer sentiment, it starts to make more sense.”

The property price rebound has been supported by government intervention – such as the HomeBuilder scheme, first-home buyer grants and stamp duty discounts – which encouraged more buyers to re-enter the market.

And, on top of this, stock remains limited.

CoreLogic noted the number of houses advertised for sale remains 20 per cent below last year and nearly 25 per cent less than the five-year average.

As a result, vendors are finding buyers for their homes more quickly, with the median selling time falling from 57 days in June to 42 days in November.

But Ms Owen said the market’s momentum could decelerate from the first half of 2021, once the number of available homes returns to 2019 levels.

“It is worth noting when you see incentives for first-home buyers it tends to have a ‘vacuum effect’, where it pulls forward purchases that may have happened anyway – and right now, they are trying to buy within the parameters of available schemes,” Ms Owen told The New Daily.

“Once those schemes run out, we will likely see housing demand slow.

And if we then start seeing an increase in available stock, that will be a test for the market – and this is already starting to play out in Melbourne where we saw total listings hit 26,000, which is matching the equivalent period from last year.”

CommSec senior economist Ryan Felsman said excess demand was most apparent in beachside and semi-rural towns where Sydneysiders and Melburnians had flocked during the working-from-home boom.

According to CoreLogic, the regions where price growth outstripped their respective capital cities included south-east Tasmania (up 15 per cent for the year), NSW’s Newcastle and Lake Macquarie region (up 8.4 per cent) and Victoria’s Ballarat (up 6.3 per cent).

Canstar group executive of financial services Steve Mickenbecker said with 93 owner-occupier loans on the market now below 2 per cent, buyers waiting on the sidelines had been convinced to jump into the market.

“Home buyers are flooding into the market, spurred on by the early signs of positive housing price movements,” Mr Mickenbecker said.

“For first-home buyers, FOMO is back in the psyche with around three in every five Millennials [surveyed in Canstar’s 2020 Consumer Pulse Report] expecting prices to rise or at least hold stable.

“Property price falls usually lag the start of recession and could still be ahead, but lenders are not expecting as deep or prolonged a correction as they were at the start of COVID-19.”